My wife, Susie, and I were walking on the beach this weekend and the subject of "Black Monday" came up. All of a sudden I was thinking back to what had happened to cause such a precipitous drop in the stock market. Whatever it was I remember feeling good about the fact that we all went through, learned from it, recovered, and actually things were much better for an extended period of time because of it.
On Friday October 16, 1987, the Dow dropped over 100 points. Of course, that's just a blink of an eye today, but at the time the Dow Jones Industrial Average was just above 2,200. The 100 point drop had people talking about the stock market everywhere we went that weekend.
I can very easily recall thinking that when Monday morning came, the market would rebound and all of the fear and doubt would disappear. I was wrong about that prediction. It seems that with all of the talk over the weekend, the fear had just been heightened. Everyone everywhere was talking about the market, and most of them very fearfully.
Back then, it seemed like Monday morning would never come. As stock brokers we had witnessed the market close above 1,000 for the first time in several years, in 1982. In the next five years it had more than doubled which was an incredible return. Now, as brokers, we all had a strong confidence that the 100 points lost on Friday would easily be made up, and then some, on Monday.
Well of course, that didn't happen. As a matter of fact the New York Stock Exchange was open for less than an hour and WHAM! Down over 100 more points. And that was only the beginning, by the end of the day the Dow Jones Industrial Average had dropped another 500 plus points. Monday October 19, 1987, became known as "Black Monday". Think of it, people who were fully invested in the stock market lost as much as 25% of their net worth practically overnight.
Some changes in regulations were made as a result of "Black Monday". These were changes made to prevent that from ever happening again. But to look where we are today, one must wonder, what happened?
Back then, it didn't take long for the market to regain momentum and close above 2,000 again. It did take the overall economy a period of time to stabilize. New regulations boosted confidence in the "system" and as a result there was more order in the financial markets. From then until now is much different.
There has been dramatically increasing greed on Wall Street, and regulations have been loosened. Also, we have a dollar which has lost value and real estate values which dropped off more than a year ago haven't even started to rise. In addition, we have foreclosures at all time highs. On top of all of this, we are now handed a $700,000,000,000.00 bail out which we are told we must accept in order to keep the economy rolling. In essence it seems its a tab that the general public is being handed to cover the cost of corporate America's excesses and failures as well as regulator's loose handling of the economy for an extended period of time.
Although the Federal Government doesn't like to mention it, we are in a recession. I also feel that we are going to see the situation reaching more and more households. We may also see more bank failures, job losses, and more foreclosures. With more and more dollars circulating almost on a daily basis, your purchasing power is declining steadily as well.
In closing I have two questions. First, have you seen this coming for a long time? And even more importantly, what are you doing now, right now today, to secure your and your family's financial tomorrow? - 15437
On Friday October 16, 1987, the Dow dropped over 100 points. Of course, that's just a blink of an eye today, but at the time the Dow Jones Industrial Average was just above 2,200. The 100 point drop had people talking about the stock market everywhere we went that weekend.
I can very easily recall thinking that when Monday morning came, the market would rebound and all of the fear and doubt would disappear. I was wrong about that prediction. It seems that with all of the talk over the weekend, the fear had just been heightened. Everyone everywhere was talking about the market, and most of them very fearfully.
Back then, it seemed like Monday morning would never come. As stock brokers we had witnessed the market close above 1,000 for the first time in several years, in 1982. In the next five years it had more than doubled which was an incredible return. Now, as brokers, we all had a strong confidence that the 100 points lost on Friday would easily be made up, and then some, on Monday.
Well of course, that didn't happen. As a matter of fact the New York Stock Exchange was open for less than an hour and WHAM! Down over 100 more points. And that was only the beginning, by the end of the day the Dow Jones Industrial Average had dropped another 500 plus points. Monday October 19, 1987, became known as "Black Monday". Think of it, people who were fully invested in the stock market lost as much as 25% of their net worth practically overnight.
Some changes in regulations were made as a result of "Black Monday". These were changes made to prevent that from ever happening again. But to look where we are today, one must wonder, what happened?
Back then, it didn't take long for the market to regain momentum and close above 2,000 again. It did take the overall economy a period of time to stabilize. New regulations boosted confidence in the "system" and as a result there was more order in the financial markets. From then until now is much different.
There has been dramatically increasing greed on Wall Street, and regulations have been loosened. Also, we have a dollar which has lost value and real estate values which dropped off more than a year ago haven't even started to rise. In addition, we have foreclosures at all time highs. On top of all of this, we are now handed a $700,000,000,000.00 bail out which we are told we must accept in order to keep the economy rolling. In essence it seems its a tab that the general public is being handed to cover the cost of corporate America's excesses and failures as well as regulator's loose handling of the economy for an extended period of time.
Although the Federal Government doesn't like to mention it, we are in a recession. I also feel that we are going to see the situation reaching more and more households. We may also see more bank failures, job losses, and more foreclosures. With more and more dollars circulating almost on a daily basis, your purchasing power is declining steadily as well.
In closing I have two questions. First, have you seen this coming for a long time? And even more importantly, what are you doing now, right now today, to secure your and your family's financial tomorrow? - 15437
About the Author:
George L. Kenney has a BA in Economics and career of twenty five years in financial services. He is now a successful online marketing pro, with a passion for helping others live their dreams. He will assist you in learning how to leverage your time, money, and technology to put you on the fast track to success. To find out more about his team and the Marketing Mentors Program Click Here
